TMI Blog1972 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as the Act, and, secondly, whether an opportunity of being heard should have been given to the persons interested in the return of the books and documents before an order of approval is made by the Commissioner of Income-tax under section 132(8) of the Act. On August 30, 1965, several officers of the income-tax department entered the office of the first respondent at 62, Bentinck Street, his chamber at 3, Bysak Dighi Lane, and his residence at 14/1, Hariram Goenka Street, on the authority of warrants of authorization issued under section 132 of the Act. After the search, the officers seized a large number of books, documents and papers belonging to the first respondent. Some of the documents seized were returned to the first respondent on February 8, 1966 some further documents were returned on February 10, 1966, and again on February 16, 1966. It is common case that certain other documents and papers are still being kept by the revenue and have not been returned to the first respondent in spite of demands. Aggrieved by this decision, the first, respondent obtained a rule nisi for appropriate writs and orders directing the return of the books, documents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of approval, and unless that order was communicated to the party claiming return of the books, it would never be possible to make the application contemplated by section 132(10). In support of his contention, counsel or the appellant relied upon a decision of the Supreme Court in Mohammad Afzal Khan v. State of Jammu and Kashmir, for the proposition that an order made in a matter need not be communicated to the person concerned. That was, however, a case relating to an order of detention made under the Jammu and Kashmir Preventive Detention Act. The petitioner, in that case, was arrested under an order made by the State Government. He duly submitted his representation and thereafter made an application to the State High Court under section 491 of the Code of Criminal Procedure. The State Government had reviewed the, case of the petitioner under section 4(2) of the said Act in consultation with a person nominated for the purpose and was satisfied that the detention should continue. During the pendency of the habeas corpus petition, the State Government made the order continuing the detention. Thereafter, orders were made extending the petitioner's detention from time to ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent, on the other hand, contended that his client was vitally affected by the detention of the books and documents. He argued that the statute authorised detention of the books for a limited period of 180 days but the detention could be continued beyond that period upon two conditions being fulfiled, namely: (i) that the Income-tax Officer has recorded reasons for detention of the books beyond a period of 180 days, and (ii) that the Commissioner has made an order giving his approval to such detention. Therefore, it was argued that the law authorised the department to detain the books beyond the limited period on fulfilment of two conditions and where an order approving such detention was made by the Commissioner, such an order would not be a valid and lawful order until it was communicated to the party affected. In support of this contention counsel for the respondent relied on an unreported Bench decision of this court in Matter No. 257 of 1967 (I.T Rao v. Bilahute Bhudan Bag). That was, however, a case of search and seizure under section 110 of the Customs Act, 1962. Under section 110 of the Customs Act, the customs authorities are required to return the goods seized upon expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of prejudicing the rights of parties, See Bachhittar Singh v. State of Punjab, State of Punjab v. Amar Singh Harika and Nripendra N. Majumdar v. N. M. Bardhan B. Where an order has the effect of depriving a person of his right to property or otherwise affecting him prejudicially, such an order to be effective and valid must be communicated to the party whose rights are affected and who is otherwise prejudiced by the order. An order made by an authority under a statutory provision does not become an order as soon as it is drawn up and signed. It does not become an effective and valid order until it is served upon the party affected. If it is allowed to remain in the office file without being communicated to the party affected, it could never acquire the character of a valid order under the statute which authorised the making of such an order. should not be understood, however, to say that all orders made under a statute of whatever descrip tion must be published and communicated. The requirement of communication arises only when a party is likely to be deprived of his right to property or is likely to be otherwise prejudiced by the order. Before proceeding to consider the next conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorise retention of the books for any length of time but the period of retention should not exceed 30 days, after all the proceedings under the statute have been completed. Therefore, it is possible for the Commissioner to give his approval to a proposal for retention of the books any number of times and for any length of period subject to the limitation in the proviso. Against each order of approval made by the Commissioner, the person legally entitled to the books has the right to apply to the Board for return of the books to him. This statutory right would be completely denied to the party legally entitled to the books if he is not told when the order of approval was made and for what length of time. In considering a question such as this, due regard must be paid to the object sought to be attained by the statute. The legislature clearly intended that the party legally entitled to the books must have an opportunity of agitating his grievance against the order of retention approved by the Commissioner, by an application to the Board, and difficulties of serving the notice upon the person affected, which may not be real in most cases cannot, in my view, be set up to deny and defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the books beyond the period of 180 days. Although this point was taken in the petition by the first respondent, it was not argued in the trial court. The only point taken before the trial court was that the approval given by the Commissioner under section 132(8) of the Act was not a valid order because it was not communicated to the first respondent. Mr. Pal argued that the provision in sub-section (8) authorising the Commissioner to give his approval to the retention of the books beyond the prescribed period, required a judicial or quasi-judicial approach. It was submitted that the order of the Commissioner giving approval was not an administrative or executive order which could be made by him without hearing the party who is likely to be affected by the order. It was further argued that the provision, that reasons for retaining the books should be recorded by the authorised officer and these reasons must be valid and relevant for the purpose for retention of the books beyond the period of 180 days (sic). The statute provided, it was argued, that valid and relevant reasons must be recorded before the Commissioner could give his approval to the retention of the books b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision in section 132(8) of the Act. The only requirement in section 132(8) is that the authorised officer should record reasons for retaining the books before the Commissioner could give his approval to such retention. Secondly, it should not be overlooked that section 132 of the Act specifically provided for giving an opportunity of being heard in some of the sub-sections, for instance, there is a provision in sub-section (5) that the Income-tax Officer should afford a reasonable opportunity to the person concerned of being beard. Again, in subsection (12) it is provided that on receipt of an application under sub-section (10), or on receipt of an application under sub-section (11), the notifying authority may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit. The legislature, therefore, has provided for an opportunity of being heard being given to a party whenever such an opportunity is intended to be given. But there is no such provision in sub-section (8) requiring the Commissioner to give an opportunity of being heard being given to the party before making an order approving the retention of the books beyond the prescribed period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 34 must also be communicated to the assessee." Although that was a decision under section 34 of the Indian Income-tax Act, 1922, the observations of the Supreme Court that the earlier stages of the proceedings for recording reasons of the Income-tax Officer and for obtaining the sanction of the Commissioner are administrative in character and not quasi-judicial, are very relevant and pertinent. There is nothing in section 132(8) of the Act to indicate that the Commissioner should have a quasi-judicial approach in giving his order of approval to the retention of the books. On the other hand, it seems to us that the order of the Commissioner in giving the approval is nothing but an administrative order and the respondent is not entitled to a show-cause notice or to an opportunity of being heard before the Commissioner makes the order approving retention of the books beyond the prescribed period. I must emphasize that, in this case, the two significant features are, firstly, that the statute has clearly provided for an opportunity of being heard being given to a party in some of the other sub-sections of section 132 and no such provision has been made in sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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